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State Name: Texas
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State Abbreviation: TX
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If you've been following the MBS Commentary, you know what a big deal this afternoon could be. Markets have been preparing for it for weeks and MBS Live members have been on top of those movements every step of the way.

This afternoon, when markets are convulsing mere milliseconds after the Fed Announcement, MBS Live members will know what's going on before anyone else. The accuracy and speed of our real-time price stream and alerts is unmatched.

Last week's bounce at a ceiling of 2.60% (twice, essentially) was enough for some DEFENSIVE hope. In other words, it introduced the possibility of the recent selling trend running out of steam near these levels. But as I cautioned at the time, there were connotations for a strong OFFENSE bringing rates in the other direction. For that, we would have at least needed to break below 2.52% and preferably 2.42% in the bigger picture. With yesterday's bounce at 2.52%, today ended up looking like a natural progression back toward higher levels.

There were ample headlines relating to the government shutdown and stop-gap funding bill today. At times, markets appeared to react to these, but those reactions are hard to separate from other trading considerations in play. The 'other consideration' include esoteric, boring stuff like curve-related tradeflows, corporate deal hedging, and plain old technicals (i.e. that bounce off 2.52%, and the subsequent trading decisions based purely on math applied to trading levels themselves, as opposed to fundamental data and news).

Bonds began the day weaker, but rallied into the 11am hour--almost back to unchanged levels. European bond trading had been a positive input, so this explains some of the weakness heading into the afternoon (Europe closed for the day around the time the sell-off began). But we also had some debt ceiling headlines, a swath of corporate bond issuance, and a break above the 2.57% technical level in 10yr yields. The selling ultimately didn't do any catastrophic damage, but with MBS underperforming, it did leave mortgage rates in the worst shape in roughly 9 months. The caveat is that today's quotes are only microscopically weaker than last Wednesday's on average.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

About the Author

A former originator, Matthew began writing for Mortgage News Daily in 2007, covering a wide range of topics. Seeing a need in the marketplace, his focus increasingly shifted toward relating MBS and broader financial markets for loan originators.
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